1. Field of Invention
This invention relates to a computer-based application in the financial field, specifically a reporting structure that aids in the decision making.
2. Discussion of Prior Art
Within the investment world, there are several books on investing that contain methodologies or wisdom that are very insightful and at times have eclipsed the return of the market by enormous amounts. The inventor recognized that when an investor would read these books they would begin to wonder if they could construct a system that would automatically generate the results of these analyses in an easy-to-read display or report. So initially, the inventor set up a spreadsheet to try and apply the wisdom and methodologies of these published advisors and discovered several things:
1. It was quite difficult to set up a template for a methodology because many times there were neither complete rules nor precise rules given.
2. There are a number of special cases that the author had mentioned that was not necessarily reflected in the rules they publicly disclosed.
3. Even after a set of rules was obtained, the inventor found it very tedious to look up and enter the data that was needed. In some cases, there could be twenty to fifty items and further more many times it wasn""t precisely clear which variation of the data the author was talking about. For example, a company""s growth rates could have such variations as the revenue growth rates, earnings growth rates, three year earnings growth rate, the five years earnings growth rate, the earnings growth rate for the last quarter, for the same quarter last year, earnings growth rate before adjustment for the extraordinary items etc.
4. It was extremely difficult to compare multiple advisors"" approaches at one time. This prevented the inventor from determining if more than one of his favorite advisors would recommend the stock he was interested in.
In addition to the above desires and issues, the inventor wanted something that would be automated so that on a daily basis he could monitor one or more securities to see when one of the several advisors changed their position on whether to buy or sell the securities. Initially it was thought that this display or report generating system would be run in a personal computer environment. However, after much thought it became clear that this could run additionally on the World Wide Web and therefore be available internationally. Also, to make the system even more powerful and helpful, a data storage means was developed so that the processing of the invention reports could retrieve its data primarily or completely from web sources and databases.
This invention is a labor saving highly automated device that analyzes a single security at a time using a plurality of advisors"" approaches, where the advisors have published and publicly disclosed their methodology in writing. There is no system in the market that evaluates multiple advisors and gives you their conclusion and reasoning behind their conclusion.
The Prior Art can be found in various shades. It could be in the lowest form a spreadsheet on any computer with complete formatting of the required columns by the user, sourcing of the input data and manual input of the data into the spreadsheet.
The second form of prior art is found in screens. Screens are based on various methodologies, which are multiple level formulas or a single level formula applied as a filter to the entire universe to select all the fields within the universe meeting the criteria. For example there are various screens on the internet which allow the user to select a desired name or a criteria, or a for a specified criteria input by the user searches the universe of the stocks in that system and gives a list of all the stocks meeting those criteria.
However both independently and collectively, these prior arts are not applicable to the present invention and the claims. The present invention does not require any formulation of the column by the users. It does not require a user to source any data. Further it does not require the user to input any data manually, or to interpret an advisor""s methodology. The only input required by the user is the company name or the stock selection ID. Thus the entire process of reading and understanding any particular methodology is obviated, the formulation of a spreadsheet to allow the data input for calculation is eliminated and sourcing of data for input is not required. The invention allows daily updates of the required data for all the methodologies by an automated process. The invention is also set up to contain the methodologies of each of the investment advisors, which processes the data for each of the companies. All the user has to do is input the company name or security ID. Thus it is entirely different from the prior art.
To properly implement the invention, the inventor had to fairly crystallize the imprecise and incomplete rules cited by some of the advisors. A rule could be considered imprecise and incomplete for many reasons. In general, it was considered imprecise when one or more of the variables used for the rule was not clearly defined or not clearly explained. For example, an advisor may indicate that the rule required the use of the company""s growth rate. The particular growth rate (earnings growth rate, revenue growth rate, sales growth rate, etc.) was not mentioned. Therefore, the inventor had to determine which growth rate to use. A rule was considered incomplete when the threshold values used for the rule were not clearly stated. For example, an advisor""s rule may require that the PE ratio be xe2x80x9cmoderatexe2x80x9d. The advisor would leave a gray area surrounding the rule and the inventor had to attempt to xe2x80x9cfuzzifyxe2x80x9d the rule and make it more black and white while still ensuring the appropriate conclusion. He accomplished this by listing out all of the criteria possibilities and determined if any of the following are conditions that were true.
1. There may have been other writings by the same author in other publications, which more precisely explained the variables. In addition to this, there may have been other sections in the same publication that aided in the clarification of the rule.
2. Of all the interpretations of the criteria, there are some that require data that is more easily and regularly available to private investors.
3. In the inventor""s experience, will the interpretation yield to erroneous results.
4. There is a common accepted industry use of the ambiguous criteria that might be found in Financial Textbooks.
5. One or more of the other advisors were explicit in the use of the same variables.
Additionally, the inventor reviewed the many examples cited within the advisors"" published methodologies. Through these examples, the inventor was able to better interpret ambiguous or incomplete criteria.
Upon completion of the interpretation of the many criteria that were required by the plurality of advisors, the inventor implemented a system that could automatically process the methodologies and produce the analysis results in the form of display or reports. He accomplished this through the use of a computer programming language, which enabled him to codify the advisors"" methodologies. The codification used was in the form of Microsoft Access sub procedures that utilize a form of Visual Basic. These sub procedures apply If-Then-Else conditional statements, along with other conditional statements such as Visual Basic Case statements, to the required variables to determine if a security satisfies the required criteria of the advisors"" methodologies. The conditional statements mentioned in the prior sentence represent the advisors"" methodology criteria (referred to as Knowledge Bases in this invention patent). There are many programming languages that utilize the same conditional logic statements as does Visual Basic, which could have been used to codify the methodologies. Additionally, the conditional statements used could vary depending on the programming language or implementation of the codification of the methodologies as long as they resulted in the appropriate conclusions. Visual Basic was chosen because it was most easily accessible and use friendly for the codification.
The processing system does not attempt to imitate the workings of an expert system due to the fact that it is not structured to allow a user to enter their own additional rules to be used in the processing. In the end, the invention provides the user with a valuable research tool that displays the analysis of a selected security for a plurality of the most popular investment advisors"" methodologies.
Accordingly, the invention has objects and advantages by addressing several unrecognized problems, which are:
a. a reader of a book or article on a investment methodology has had no choice in the past for getting that methodology instantly applied to a security that he is currently interested in. The invention applies that methodology to a specific stock without the user having to define and codify the methodology, look for several sources of data required for the methodology, decide how to handle exceptions, and arrive at the conclusion with the supporting reasoning.
b. any investor wanting to analyze a stock in the past using 2 or more methodologies found it extremely time consuming and frustrating as several methodologies would require the entry of upwards of 60 variables.
c. not only is it time consuming to analyze just one security for a particular date in time, but it was impractical for any user on a daily basis to perform the methodology based on the latest data, and especially so if there were multiple securities he wanted to follow.
The present invention does not require any formulation of rules or coding by the users. It does not require a user to source any data. Further it does not require the user to input any data manually. The only input required by the user is the element (such as a company name) or the element identification (such as a ticker symbol.) The invention allows daily (or even more frequent) updates of the required data for all the methodologies by an automated process. And the output is one or more reports which provide a summary report card of the conclusions of the different published methodologies, and can optionally provide a detailed written analysis of the supporting reasons of each step of a methodology.
The invention utilizes a computer apparatus to automatically display a report containing the analysis results for a plurality of advisor methodologies for one specific security at a time.
The basic claimed invention generates reports, independent of how the data is input into the system. One embodiment of the system also allows import, acceptance or capture of data into the system. The embodiment described here shows the generation of the invention reports through the processing of a plurality of Knowledge Bases.